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|China Takes Offensive To Export Low Carbon Fe-Cr With Quadrupled Exports In 1st Half 2008|
|= Russian Low Carbon Fe-Cr Is Also Preparing To Adjust The Price For Shipments In Q4 / 08|
The exports of Chinese low carbon ferro-chrome in the first half (January - June) of 2008 increased by 4 times compared with that in the same period of 2007 and the offensive for exports of low carbon ferro-chrome taken by Chinese producers is anticipated to continue further. The market price of low carbon ferro-chrome has been rising to a considerable extent but, under the circumstances, it is now thought to be necessary for Russian producers, who are major suppliers for the world market, to adjust their price of low carbon ferro-chrome for shipments in the fourth quarter (October - December) of 2008. |
Chinese low carbon ferro-chrome is being currently offered for Japan at US$4.05 - 4.10 per lb. of Cr CIF with product of carbon 0.1% max.(Cr 60 - 64% and P 0.04% max.). Chinese low carbon ferro-chrome was once offered at a lower price than US$4.00 but a weakness of Chinese price has come to a standstill at present.
China is unable to increase their exports of high carbon ferro-chrome to a substantial extent but, according to the customs-statistics released in China, this country exported 43,255 tons of low carbon ferro-chrome in the first half of 2008, which had a remarkable increase of 4 times compared to that (9,976 tons) in the same period of 2007. The quantity of 43,255 tons as mentioned above included the cargoes of low carbon ferro-chrome produced in Kazakhstan, which were exported from Kazakhstan to China and have been now stocked at Qingdao port for sales (exports) ex. warehouse on consignment, and the net quantity of Chinese low carbon ferro-chrome by deducting the cargoes from Kazakhstan came to 36,000 tons, which China exported in the first half of 2008.
The quantities of low carbon ferro-chrome exported from China to main destinations in the first half of 2008 were <> for Japan : 12,490 tons (compared with 6,367 tons in the same period of 2007), <> for South Korea : 7,794 tons (2,811 tons in 2007) and <> for Europe (mainly for Netherlands) : 11,948 tons (nil in 2007). The cargoes of low carbon ferro-chrome exported from China to Japan and South Korea in the first half of 2008 included those from Kazakhstan as mentioned above but, in view of the fact that Japan imported 7,320 tons of low carbon ferro-chrome from Kazakhstan in the first half of 2008, a simple calculation resulted in the net quantity of 5,170 tons of low carbon ferro-chrome, which was produced in China and exported from China to Japan in the first half of 2008. (Note : According to the statistics released by the Ministry of Finance of Japan, 5,132 tons of low carbon ferro-chrome were imported from China into Japan in the first half of 2008 .)
In the course of the last several years, the exports of Chinese low carbon ferro-chrome had been depressed on a low level of approximately 10,000 tons per annum but the reason, why China suddenly increased their exports of low carbon ferro-chrome in the first half of 2008 to a remarkable extent, was due to a substantial improvement of its profitability. In case of Russian low carbon ferro-chrome, the movements of price (per lb. of Cr CIF for carbon 0.1% max. material) for Russian product settled with regular consumers of Japan on quarterly base in 2008 were <> for January - March quarter : 290 - 390 US-Cents, <> for April - June quarter : 465 - 480 US-Cents and <> for July - September quarter : 510 - 515 US-Cents. This steep rise of price for low carbon ferro-chrome has been influenced by the soared price in the international market.
From Chinese point of view, the following factors are making significantly profitable for export of low carbon ferro-chrome (at 400 US-Cents per lb. of Cr) ; (1) Spot price of high carbon ferro-chrome has come down to a lower level than 180 US-Cents per lb. of Cr CIF Japan at present and, accordingly, a differential of prices between high carbon and low carbon materials has widened by more than 200 US-Cents to be too enough to cover the charge for secondary refining., (2) It is difficult to sell low carbon ferro-chrome on spot base at the price level (500 US-Cents) settled on regular Russian product but, if spot cargo of low carbon ferro-chrome could be offered by a discount of more than 100 US-Cents per lb. of Cr from the price of Russian low carbon ferro-chrome, it would be possible to see a certain chance to materialize spot business., and (3) The duty to be imposed on export of ferro-chrome from China is 20% but low carbon ferro-chrome will have more margin to bear this export duty as price of low carbon material is much higher.
According to the data compiled by ICDA (The International Chrome Development Association), the world output of low carbon ferro-chrome in 2007 came to 630,000 tons. This output supposedly included 184,000 tons of Chinese product and it was informed from China that this country is scheduled to increase their production of low carbon ferro-chrome in 2008 by 100,000 tons per annum. High carbon ferro-chrome is used as mother metal to produce low carbon ferro-chrome and, in order to increase production of low carbon ferro-chrome, it is thought to be comparatively easy to install such furnaces as converter, which are operated to refine high carbon ferro-chrome as the second process.
Therefore, it means that China has just started to enter into the export market of low carbon ferro-chrome. China is anticipated to continue their exports of low carbon ferro-chrome even in 2009 and has already commenced their sales of low carbon ferro-chrome in Europe by means of delivering the cargoes stocked at warehouses in Rotterdam.
Special steel companies of Japan have still maintained the structure to produce special steels on a full scale but automobile production is being shadowed to some extent and, accordingly, it will be inevitable for special steel mills to be influenced by this aspect of automobile industry. In the middle of a maelstrom to be hard competitions on cost-wise, it is marked to see how extent is Chinese low carbon ferro-chrome able to permeate into the world market of this ferro-alloy with a weapon of discounted price by means of overcoming a disadvantage of its quality (impurities).
|last modified : Mon 25 Aug, 2008 [11:13]|